Employee job satisfaction is front and center for Frank Ace, CIO of the Wisconsin Department of Justice. Ace has a list a mile long of IT goals for 2007, from securing sensitive data to measuring the value of mobile devices for more employees to more efficiently managing the DOJ's growing web of technical support vendors. Right up there? "Keeping staff happy, trained and not overly stressed," Ace said.

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Retention is big. Their bonus is tied to retention now. Moti VyasCIOViejas Enterprises

Ace is among the ranks of CIOs who are making hiring and retaining good employees a top priority. Could this be the year of the IT worker? Although the economic outlook for 2007 is still murky, IT hiring appears to be off to a solid start, judging by reports from a sampling of CIOs and prognosticators from across the country. A looming IT labor shortage -- whether real or perceived -- is also causing CIOs to pay more attention to the talent they've got, tap their companies' business ranks for fresh recruits and think twice about putting older workers out to pasture.

CIO Moti Vyas plans to hire application engineers and IT security experts in 2007. In addition he's on the prowl for a "savvy communications executive assistant" who can promote his staff's achievements to the company. But his major staff initiative at Viejas Enterprises, a sprawling Indian-owned casino in San Diego, is hanging on to the talented employees already on the payroll. "Retention is big. Their bonus is tied to retention now," Vyas said.

CIOs cite business growth

A poll of 1,400 CIOs from U.S. companies by Robert Half Technology, an IT staffing firm in Menlo Park, Calif., showed 16% of executives plan to add IT staff in the next three months while 2% predict staff decreases. The net 14% is the highest figure reported to the firm since fourth quarter 2001, and up four percentage points from the prior quarter's forecast. Business growth was the leading reason cited by CIOs for the additional hires, followed by a need for more customer and end-user IT support.

As was true in last year's Half report, the most optimistic hiring plans come from CIOs in the "East South Central" region of Alabama, Kentucky, Mississippi and Tennessee, where a net 22% of IT executives anticipate hiring more workers. The area's "affordable cost of doing business" is spurring companies there to expand and enticing others to relocate there, said Katherine Spencer Lee, executive director at Robert Half Technology. Job candidates in the four-state region are getting multiple job offers, as companies scramble to compete for workers.

Other findings: Technology executives at the largest firms, those with 1,000 or more employees, will do the most hiring, forecasting a net 23% increase in staff. The transportation business leads the industry sectors in hiring, with 25% of CIOs planning to add employees and only 1% projecting staff reductions. As for the skills most in demand, expertise in Microsoft Windows administration is still a hot commodity, with 77% of CIOs planning to add personnel in that area. Nearly as many CIOs surveyed, 71%, also planned to hire network administration workers, and 63% cited a strong need for database administrators in Oracle, SQL Server and DB2.

Spending dims, even as hiring shows signs of growth

As the job market seems to be picking up, purchases of IT goods and services and total IT spending is expected to lag behind past years. Forrester is forecasting a 5% global increase in IT purchases of new goods and services in 2007, down from 8% increases in both 2006 and 2005.

A slowing U.S. economy is the main cause, said analyst Andrew Bartels, lead author of the report. Less spending by the United States, the world's single largest consumer of IT goods and services, is expected to trigger a decrease in new purchases and investments made by major trading partners in Asia Pacific as well as the rest of the Americas. Total global spending on technology -- what Forrester calls the IT operating budget -- will also lag behind spending in 2006, rising 6% to a $21.3 trillion in 2007, down from an 8% increase in spending in 2006.

Software investment is the "brightest sector" in a sluggish year, projected by Forrester to grow 7% in 2007, a blockbuster increase when compared with a projected 3% growth in investment in communications equipment and a 4% growth in spending on computer equipment.

Martha Heller is managing director of the IT practice at Z Resource Group Inc., an executive recruiting firm based in Westborough, Mass. She said she expects IT hiring to remain strong throughout the year. First, any capital expenditures companies make now in IT technology have to be supported, regardless of how the economy fares later, she said. Plus, the specter of looming IT labor shortages is getting the C-level's attention.

Heller said: "I am seeing CIOs across all industries get budget approval for increased head count in IT, and that is an indicator that somebody out there and up there understands the value of IT."

The bulk of the hiring she sees in her practice is for positions "that sit at the intersection of business and technology." Program and project managers, business analysts and experts in enterprise architecture are in strong demand. "These are high-level experts, lead architects, the senior project managers, people who do not necessarily have staff reporting to them but are still compensated in the six figures," Heller said.

The widely perceived bias against older workers is also starting to subside, in the face of a diminishing IT talent pool, Heller said. "I see more and more companies willing to entertain hiring seasoned workers. Companies are recognizing that, 'Geez, we need these people.' I am also seeing people hiring from the business into IT," she said, pointing to a management IT search she is doing for a Fortune 500 company that lists business experience as a job requirement.

Heller's observations jibe with a recent report from Forrester Research, "Is There A Career Future in Enterprise IT." The study paints a complicated picture of the IT job market, showing an immediate need among companies for highly trained technology specialists as well as a growing belief among IT executives that "tech knowledge can be trained."

The paradox is that entry-level jobs at the enterprise level are hard to come by. Roughly 40% of IT executives interviewed by Forrester said they don't hire at the entry level, choosing instead to outsource commodity IT services. Of those who do hire at the entry level, however, 50% are hired from the ranks of college grads or MBA's, and only 27% of that group considered IT-specific majors a prerequisite for hiring.

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